Study: Food safety costs to continue to climb

Fresh produce growers, handlers and processors can expect the cost of food safety — and by extension, traceability — products to continue to increase for at least the next five years, according to a study by The Freedonia Group, Cleveland, Ohio.

“Smart labels and tags will represent the fastest rate of increase among all major types of food safety products through the rapid adoption of new smart label technology and food packaging,” said Corinne Gangloff, media relations director for The Freedonia Group.

The labels and tags, including radio frequency identification devices, are key tools in the fresh produce industry’s traceability initiatives.

The study was not limited to fresh produce, but concluded the demand for food safety products in all segments of the industry will climb by 6.7% annually, Gangloff said.

“The cost to the food industry will be $2.9 billion in 2014,” she said.

The study did not address effects of the rising food safety costs on retail prices, Gangloff said.

Food processors accounted for 70% of total demand for food safety products in 2009 and will continue to dominate the overall market in the coming years, the study found.

The cost of smart labels and tags climbed at the rate of 8.6% annually from 2005 through 2009, according to the study. Through 2014, The Freedonia Group projects an annual increase of 9.2%, considerably faster than any other category of food safety products.

The other food safety products identified in the study are disinfection products, diagnostic products and software and tracking systems.

Gains in RFID tags are expected to be strong, the study said, because their use for inventory tracking and management continues to grow. The study concludes the demand for bar code labels and tags will be restrained “due to market maturity as well as continued loss of market share to RFID tags.”

Diagnostic products is the largest category for what the study termed “farm markets,” which includes produce, dairy and meats. That diagnostic products is the largest category, the study found, is because of “increased pressure to perform food safety testing following recent events involving contaminated fresh produce and a stricter stance on food safety by regulators.”

The false positives for bacteria experienced by some grower-shippers and laboratories were not factored into the study.

“It looked at demand trends for diagnostic products, but not the efficiency of the products,” Gangloff said.